Choice tells Australians to become digital smugglers

Updated
March 23, 2013 09:30:00

The consumer advocacy group Choice says it's published guidelines to help online consumers pretend they're not buying products within Australia. A Senate inquiry has heard evidence from three IT giants, Microsoft, Apple and Adobe on why they charge much higher prices for their digital products in Australia. Choice says Australian consumers have a right to try to get around the companies' geoblocking, and pretend they're buying products from outside Australia to get a better deal.

ELIZABETH JACKSON: Consumer advocacy group Choice is calling on Australians to become digital smugglers to foil the website restrictions of big IT companies and buy software cheaply from overseas.

The comments come a day after a Senate inquiry heard evidence from three giant IT companies - Microsoft, Apple and Adobe - on why they charge much higher prices for their digital products in Australia compared to other countries.

MATT LEVEY: There's one particular creative suite product from Adobe which currently has a $1,200 price difference between the US price and the Australian price.

Similarly with Microsoft, there was one infamous product where you could actually pay someone, we calculated, to fly to the US and back twice, buy the product when they're there, and still come out ahead.

SARAH DINGLE: One of the reasons given by the big IT companies for the price differentials is that they maintain separate websites for Australian customers and separate Australian servers, essentially. Is that enough to justify a difference in price?

MATT LEVEY: There were quite frankly some bizarre statements from Adobe relating to the bespoke and personalised nature of their website.

You only had to look at social media very quickly to understand there were many creatives out there who were finding it quite an impersonal experience to be charged $1,200 more on the website.

So its attempts to try and sustain an out-dated business model, which is that in a digital age you can carve the world up into different regions, charge people in Australia way more than people in the US even though you're just a few mouse clicks away from actually identifying the price gouge.

SARAH DINGLE: What does Choice want the Australian government to do to rein in this kind of activity?

MATT LEVEY: Geo-blocking is essentially technological measures which block you from accessing a cheaper price.

For example, as an Australian, it's the measure which forces you to the Australian part of Microsoft's or Adobe's site, rather than the cheaper products - the cheaper identical products in the US part of the site.

Now we'd argue there's a strong case that geo-blocking is anti-competitive. So we certainly think there's a case for the Committee to make a recommendation around that and for that to lead to some sort of government action.

SARAH DINGLE: What can consumers do in the meantime, then?

MATT LEVEY: Choice have published a completely independent buyer's guide to circumventing geo-blocking. You can actually read some tips on how to get around these virtual walls ...

SARAH DINGLE: Is that legal?

MATT LEVEY: Look, in some cases it's a grey area, but we're not talking about pirated products here. We're suggesting that people buy entirely legitimate official products from places where they're cheaper.

We're talking about measures like VPN (virtual private network) services which people use to disguise their IP (internet protocol) address so that you don't actually get directed to the Australian part of the website. There's people who've got stories about how they've set up US iTunes accounts.

Now some of these things may violate the terms of service of a business like Apple, and that's something that consumers need to be conscious of and take into account, but in no way is this stealing.

It's just accessing them at a cheaper rate.

SARAH DINGLE: What would you say though to claims that that's sort of a genteel form of smuggling?

MATT LEVEY: Look, if businesses want to set up virtual walls to make Australians pay higher prices, then we think Australians have every right to use legitimate means to climb those walls, to knock them down, to get around them.